Following identification of an error in the application of the agreed
statistical analysis plan, a reanalysis of the data was undertaken. As
shown in the table below, as compared to the initially reported values,
the reanalysis revealed a 2 ml decrease in the change in Forced
Expiratory Volume (FEV1) from baseline to pre-dosing on day
28, which resulted in TC-6987 no longer achieving the study’s
protocol-defined success criteria on that co-primary endpoint. However,
TC-6987 continued in the reanalysis to meet protocol-defined success
criteria on the study’s other co-primary endpoint, change in FEV1 from
baseline to two hours post-dosing on day 28. Reanalysis of the post-dose
measure revealed an incrementally stronger signal of a drug effect than
the initial analysis.

“As I said previously, this exploratory study in asthma accomplished our
goal of detecting in patients a signal of the potential of NNR
Therapeutics in the treatment of disorders outside of the CNS. We are in
the process of considering potential next steps for this compound and
indication,” said J. Donald deBethizy, Ph.D., Targacept’s President and
Chief Executive Officer. “We regret not having discovered the
statistical analysis error initially.”

About the Study

The study was a double blind, placebo controlled, parallel group Phase 2
trial conducted at 23 sites in the United States. The study enrolled 93
adult patients with persistent mild to moderate asthma that were being
treated with inhaled corticosteroids, and 90 patients completed the
study. The study design provided for a four-week wash-out period during
which patients received a low-dose inhaled corticosteroid while
discontinuing their current asthma medication (other than permitted
rescue mediation). Patients were then randomized into one of two cohorts
and received either placebo or oral TC-6987 once daily, together with
the low-dose inhaled corticosteroid, for four weeks. Patients in the
TC-6987 cohort received a 100mg dose the first day of dosing and then a
50mg dose for the remainder of the dosing period. The study concluded
with a two-week follow-up period.

This press release includes “forward-looking statements” made under the
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements other than statements of
historical fact regarding, without limitation: any future development of
TC-6987 or of any other Targacept product candidate as a treatment for
asthma; the use of NNR Therapeutics to treat non-central nervous system
disorders; or Targacept’s plans, expectations or future operations,
financial position, revenues, costs or expenses. Actual results,
performance or experience may differ materially from those expressed or
implied by any forward-looking statement as a result of various
important factors, including without limitation risks and uncertainties
relating to: the conduct and results of any future clinical trials or
non-clinical studies or assessments of TC-6987; whether positive
findings from any completed clinical trial of TC-6987 will be replicated
in any future clinical trials; Targacept’s ability to protect its
intellectual property related to TC-6987; and the timing and success of
submission, acceptance and approval of any regulatory filings for
TC-6987. Risks and uncertainties that Targacept faces are described in
greater detail under the heading “Risk Factors” in Targacept's most
recent Annual Report on Form 10-K and in other filings that it makes
with the Securities and Exchange Commission. As a result of the risks
and uncertainties, the results or events indicated by the
forward-looking statements may not occur. Targacept cautions you not to
place undue reliance on any forward-looking statement.

In addition, any forward-looking statement in this press release
represents Targacept’s views only as of the date of this press release
and should not be relied upon as representing its views as of any
subsequent date. Targacept disclaims any obligation to update any
forward-looking statement, except as required by applicable law.

NNR Therapeutics™, Pentad™ and Building Health, Restoring Independence®
are trademarks or service marks of Targacept, Inc. Any other service
marks, trademarks and trade names appearing in this press release are
the properties of their respective owners.

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